Brussels, 16/12/2013 (Agence Europe) - On 13 December, the European Investment Bank (EIB) decided to introduce two innovative financing tools for small and medium-sized companies (SMEs) in Cyprus.
A €50 million first contract under the Trade Finance Facility was signed. The Facility is geared to supporting foreign trade activities of Cypriot SMEs and mid-caps. Under this instrument, the EIB offers guarantees to foreign banks providing trade finance to Cypriot SMEs and mid-caps. By mitigating the risks involved in trade financing, the Facility should contribute to re-ignite trade flows with Cyprus, favouring an export-led recovery promoted in particular by SMEs and mid-caps.
A €100 million first loan was granted to the Republic of Cyprus under the Cyprus Entrepreneurship Scheme. The Republic of Cyprus will use the EIB finance to establish a fund mechanism under which the state and commercial banks operating in Cyprus will lend to Cypriot SMEs on a risk-sharing basis. Once operational, this innovative EIB product, developed in synergy with the Cypriot Government, will develop support for the investment and working capital needs of Cypriot SMEs. The day-to-day management of the scheme, is expected to be entrusted to the European Investment Fund (EIF) - the financing arm of the EIB Group specialising in SME risk-taking products. (OL/transl.fl)